ConAgra, whose products include Slim Jim, Chef Boyardee, and Orville Redenbacher, announced a major company restructuring Thursday that will include a move to Chicago and 1,500 job cuts.
The company, which has 32,900 employees, confirmed that the job cuts are planned for their corporate offices and not the production plants. The 1,500 layoffs represent about 33% of the company's office-based personnel.
And why Chicago?
Moving its headquarters to the Windy City will bring the company “to the heart of one of the world’s business capitals and consumer packaged goods centers,” ConAgra said in a statement. The company also hopes the move will attract top talent in the consumer food business.
When about 700 ConAgra employees move to Chicago’s Merchandise Mall next year, they will join other food companies such as Tootsie Roll Industries Inc and Quaker Oats Co. Kraft Heinz is also planning an upcoming move to Chicago.
With these changes, ConAgra expects to save $300 million within the next three years, a significant figure for the company since it has only reported an increase in net sales twice in the last six quarters. Last month, ConAgra reported a first-quarter loss of $1.2 billion.
ConAgra announced in June that it will sell Ralcorp, after buying the company two years ago for $5 billion. Jana Partners, a major stockholder in ConAgra, pressured the company to sell Ralcorp, citing the acquisition for the poor results.
ConAgra’s rivals, such as Campbell Soup Co, General Mills, and Kraft Heinz Co, have recently made similar cuts as consumers shift away from processed foods.
Omaha leaders are worried about the move’s economic impact on their city. After Omaha Mayor Jean Stothert met with ConAgra executives and offered them incentive packages to stay, she told the Omaha World-Herald, “I didn’t hear what I wanted to hear.”
Chicago Mayor Rahm Emanuel said in a statement that “this decision by ConAgra Foods further solidifies Chicago’s role as one of the world’s leading destinations for food processing companies.”
ConAgra CEO Sean Connolly said the company will “retain a major presence in Omaha, where we have deep roots,” with a base of 1,200 employees. Originally known as Nebraska Consolidated Mills headquartered in Grand Island, Neb., the company changed its name to ConAgra in 1971 and then moved to Omaha in 1988.
Omaha is also home to other major companies in different industries, such as Mutual of Omaha, Union Pacific, and Warren Buffet’s Berkshire Hathaway.